‘Ashamed’ HSBC puts aside $700m for money-laundering fines

HSBC has said it is setting aside $700million (£445million) for eventual fines over money-laundering, as the bank’s chief executive apologised for the ‘mistakes of the past’.

HSBC has apologised for its involvement in a money-laundering scandal (Picture: AP)

Stuart Gulliver said a US Senate investigation showing HSBC allowed rogue states and drug cartels to launder billions of dollars through its American arm was ‘shameful, embarrassing [and] very painful’.

But the bank warned the final penalties over the scandal could be ‘significantly higher’ than the amount already set aside.

HSBC has also set aside $537million (£341.6million) in the three months up to June, up to a total of $1.7billion (£1.1billion), for mis-selling of payment protection insurance (PPI), while the bank also took a $237million (£150million) hit for mis-selling complex financial products.

‘We are profoundly sorry for our mistakes, and are committed to putting them right,’ Mr Gulliver said.

The money-laundering scandal led to the resignation of head of compliance David Bagley, while UK business minister Lord Green, who was chairman at the time of the scandal, also came under severe pressure.

The billions being set aside overshadowed better-than-expected first-half results that saw underlying pre-tax profits dip three per cent to $10.6billion (£6.7billion) and operating income rise three per cent to $36.9billion (£23.5billion).